Even exchanging SMS messages with someone who doesn’t use TextSecure, there is some benefit - you still get locally encrypted storage of all SMS messages on your phone. That means (as long as you have set your passphrase timeout appropriately and such) that if your phone is seized by police / your nosy sibling, they will not have access to all your stored conversations.

In at least some jurisdictions, arresting officers can look through a cellphone without a warrant, if there’s no password lock on it. Where the arrestee has taken some measures to protect their privacy, that needs a warrant, the same as requesting texts from the carrier (again - depending on jurisdiction"

So, in this case, it might raise the protection to the level of requiring a warrant.

I think it’s smarter than you give it credit for… but it almost doesn’t matter at this stage. Consumer crypto fails because it’s really hard to get people to use it, not because advanced attackers subvert it. If the defaults are too weak they can be adjusted later… but if this app doesn’t fail silently, it will be a hassle to use and I will disable it.